Gilead Sciences, Inc. GILD announced that the FDA approved additional indications for Harvoni (ledipasvir 90 mg/sofosbuvir 400 mg) tablets and Sovaldi (sofosbuvir 400 mg) tablets. These drugs can now be used for the treatment of chronic hepatitis C virus (HCV) infection in adolescents without cirrhosis or with compensated cirrhosis, 12 years of age and older or weighing at least 35kg.
Shares of Gilead underperformed the Zacks classified Medical-Biomedical and Genetics industry in the last one year with the stock losing 30.4% during this period, compared with the industry’s decline of 9.5%.
We remind investors that while Harvoni is already approved for pediatric patients with genotype 1, 4, 5 or 6 chronic HCV infection, Sovaldi was approved for pediatric patients with genotype 2 or 3 chronic HCV infection in combination with ribavirin.
Hence, the approvals of Sovaldi and Harvoni will benefit patients from interferon-free treatment for HCV infection. As per estimates, of the 23,000–46,000 pediatric HCV patients in the U.S., most are infected with the virus at birth.
As a result of the approvals, children aging 12 and older in the U.S. with genotypes 1 to 6 chronic HCV infection will now have the option of two direct-acting antiviral regimens that offer high cure rates and eliminate the need for interferon injections.
However, Gilead’s HCV franchise continued to witness slowdown in the fourth quarter of 2016 across key markets including the U.S. and Europe, reflecting lower sales of Harvoni and Sovaldi as a result of competitive and pricing pressure. HCV product sales were weaker than expected due to fewer new patient starts for Harvoni and lower revenues per patient.
Higher discounts and payer mix continue to hurt sales. Lower patient starts were also observed in the early launch markets in Germany and France while Spain and Italy continued to experience budgetary constraints. Higher discounts and payer mix continue to impact sales adversely.
Moreover, Harvoni, Sovaldi and Epclusa, face competition from AbbVie’s ABBV Viekira Pak and Viekira XR among others.
Zacks Rank & Key Pick
Gilead Sciences currently carries Zacks Rank #5 (Strong Sell).
Better-ranked stocks in the health care sector are Heska Corp. HSKA and Retrophin, Inc. RTRX. Both the stocks sport a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Heska’s earnings per share estimates increased from $1.53 to $1.65 for 2017 and from $1.90 to $2.01 for 2018 over the last 30 days. The company posted a positive surprise in three of the four trailing quarters with an average beat of 291.54%.
Retrophin’s loss per share estimates narrowed from 85 cents to 72 cents for 2017 and from 67 cents to 53 cents for 2018 over the last 60 days. The company posted positive earnings surprises in two of the four trailing quarters, with an average beat of 80.55%.
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